How a Supreme Court ruling may stop you from reselling just about anything

Wiley v. Kirtsaeng may be the IP case of the decade—affecting all from eBay to libraries.

On Monday, the US Supreme Court will hear arguments in a case that pits a major textbook publisher against Supap Kirtsaeng, a student-entrepreneur who built a small business importing and selling textbooks.

“This case is an attempt by some brands and manufacturers to manipulate copyright law.”

Like many Supreme Court cases, though, there's more than meets the eye. It's not merely a question of whether the Thai-born Kirtsaeng will have to cough up his profits as a copyright infringer; the case is a long-awaited rematch between content companies seeking to knock out the "first sale" doctrine on goods made abroad (not to mention their many opponents). That makes Wiley v. Kirtsaeng the highest-stakes intellectual property case of the year, if not the decade. It's not an exaggeration to say the outcome could affect the very notion of property ownership in the United States. Since most consumer electronics are manufactured outside the US and include copyrighted software in it, a loss for Kirtsaeng would mean copyright owners could tax, or even shut down, resales of everything from books to DVDs to cellphones.

"First sale" is the rule that allows owners to resell, lend out, or give away copyrighted goods without interference. Along with fair use, it's the most important limitation on copyright. So Kirtsaeng's cause has drawn a wide array of allies to his side. These include the biggest online marketplaces like eBay, brick-and-mortar music and game retailers, and Goodwill—all concerned they may lose their right to freely sell used goods. Even libraries are concerned their right to lend out books bought abroad could be inhibited.

John Wiley and Sons, the textbook publisher suing Kirtsaeng, has its share of backers as well, including the movie and music industries, software companies, and other book publishers. Those companies argue differential pricing schemes are vital to their success, and should be enforced by US courts. Nearly 30 amicus briefs have been filed in all.

Supporters of Kirtsaeng are mobilized, following an alarming—but not precedential—loss in an earlier case, Omega v. Costco. On a call with reporters this week, librarians and lawyers for pro-Kirtsaeng companies painted a stark picture of what might happen should he lose the case. If the appellate court ruling against Kirtsaeng is allowed to stand, they suggest copyright owners could start to chip away at the basic idea of "you bought it, you own it."

"This case is an attempt by some brands and manufacturers to manipulate copyright law, to control the distribution and pricing of legitimate, authentic goods," said eBay's top policy lawyer, Hillary Brill. "When an American purchases an authentic item, he shouldn't have to ask permission from the manufacturer to do with it what he wants."

Without "first sale" doctrine in place, content companies would be allowed to control use of their goods forever. They could withhold permission for resale and possibly even library lending—or they could allow it, but only for an extra fee. It would have the wild effect of actually encouraging copyrighted goods to be manufactured offshore, since that would lead to much further-reaching powers.

"When we purchase something, we assume it's ours," said Overstock.com general counsel Mark Griffin. "What is proposed by [the content companies] is that we change the fundamental notion of ownership rights."

Book publishers and their content-industry allies say those concerns are overblown. No assault on libraries and garage sales is forthcoming, they argue. These organizations simply have a right to set different prices abroad, without being undermined in the US by importation they say is illegal.

Thrifty students, textbooks, and the Internet: A brief history

The road to the Kirtsaeng clash has been a long one. Ultimately, this confrontation has been brewing since the rise of Internet marketplaces like eBay and Amazon in the mid-1990s. It became easier to get price information about goods being sold overseas, and consumers could see that identical or good-enough products were often being offered for prices much lower than the products being hawked in the US. At the same time, the big shopping sites made it simple for anyone to become their own business, selling and shipping around the globe.

The textbook market was an obvious place to look for arbitrage. Students have been complaining about the high cost of books for many years; they also became the first group to enthusiastically embrace life online, and naturally looked for ways to cut costs.

Foreign-born students, exposed to the lower-priced textbooks on trips home, became some of the first to see the opportunity. The same textbooks they were using to study medicine, engineering, and mathematics in the US were being sold in their home countries for a fraction of the cost. Often a Chinese, Thai, or Indian edition of a textbook had a more cheaply bound cover, sometimes with the local lettering on the front, and perhaps cheaper paper. The internal contents, however, were often the exact same English words being read by their classmates buying high-priced US editions.

By 2003, the secret was out. Students' Internet-age solution to the problem of costly textbooks hit the front page of the New York Times. For some students, it was as simple as logging on to Amazon's UK site to comparison-shop. A biochemistry text was $146.15 on the American Amazon site, but sold on the UK site for a mere $63.48, plus $8.05 shipping, one student found. A math textbook cost $110 in the US, but sold for $41.76 plus shipping in Britain.

Enlarge/ The same first-edition textbook stocked by Amazon was over $100 cheaper when purchased from amazon.co.uk just a couple of days ago.

Even cheaper prices were found in Asia on English textbooks. The local college bookstore at Purdue University began buying overseas after it had to start competing with student-resellers—the Indian Association at Purdue bought hundreds of books on their own.

Neither the students nor the bookstores quoted by the Times in 2003 thought they were doing anything illegal. It was thought to be settled law; in a 1998 Supreme Court case called Quality King, the high court found that copyright owners couldn't control the re-importation of goods. They were limited by the "first sale" doctrine, which meant the rights held in a particular copy of a work expired once it was sold or given away.

Years passed, and copyright owners found a wrinkle in that ruling. The shampoo bottles in Quality King had been made in the US but then shipped abroad, and re-imported. In cases where goods were actually produced abroad—as foreign textbooks generally were—copyright owners argued unauthorized importers were guilty of infringement. Because imported foreign textbooks were not "made legally under this title [the Copyright Act]," they weren't subject to first sale at all. Or so the thinking went.

It seems like an audacious argument, but sure enough, student book-sellers were hit with copyright lawsuits. They fought back hard—but, for the most part, they have lost.

Kirtsaeng in court

Supap Kirtsaeng lost first and lost hardest. He came to the US from Thailand in 1997 to study at Cornell University, and later went on to get a PhD in mathematics from the University of Southern California. From 2007 to 2008, he financed his education—and made extra money, doubtless—by importing textbooks from Thailand and selling them under his eBay handle, bluechristine99.

The book publisher, John Wiley and Sons, didn't want to see those books in the US—and it had said so. Each book was marked: "[A]uthorized for sale in Europe, Asia, Africa and the Middle East Only... The Publisher may recover damages including but not limited to lost profits and attorney's fees, in the event legal action is required."

Kirtsaeng didn't abide by those warnings. He talked to some Thai friends; he consulted "Google Answers;" and he went ahead and sold books.

The warning in the books was not an idle one. Wiley and Sons followed through on their threat and sued Kirtsaeng in 2008. Kirtsaeng's lawyer was unable to get the case thrown out on "first sale" grounds. By the end of 2009 Kirtsaeng was in court, justifying his importation business to a jury.

Lawyers portrayed Kirtsaeng to the jury as a Thai "gray market" mogul who had gone far beyond financing his own college education—a portrayal that US publishers continue to push. Working with friends and family who packaged and shipped his books, he made plenty of money selling extra books on eBay. Publishers' lawyers tallied up his receipts for the jury: $1.2 million in a few short years.

The jury found Kirtsaeng guilty of infringing copyrights in eight books he had sold, and he was ordered to pay $600,000 in damages—$75,000 per book. He appealed, but a panel of judges ruled 2-1 in the publishers' favor.

Kirtsaeng returned to Thailand in 2010 after earning his doctorate from USC, but his court case continues.

200 Reader Comments

How it should be, unless someone makes it plainly clear that you are buying a license, they can't tell use shit what we do with it after we buying it. And unless there is a label affixed physically to the item in a font and size in a large enough font that someone with less than 20/20 vision can read it, you can assume you own the item. And if you're buying a depreciable item (furniture, clothing, art, house etc.), it is not allowed to be licensed; anything that cannot be expect to remain intact in 5, 10, or even 100 years must be sold, not licensed.

I'm sorry, but that's just a terrible idea. Do you really want tuition to go up even more because of your actions?

OK, then. Only take goods from those 'campus bookstores' run by a large corporation like Barnes and Noble. The university I went to, long ago abandoned it's independent bookstore in favor of contracting the service out to B&N and mine wasn't the only one. I'd be surprised if B&N had a contract with enough foresight to stipulate penalties in case of student theft.

True. My book burning idea will cause pain to those who do not really deserve it. Including the protesters who will no doubt be arrested. So... pain all around! If you have a hassle-free, completely benign method of protest available, please share. And no, I don't think that Internet petitions work.

Quote:

Not to mention, supporting crime at all is not the way to fix things.

History disagrees, I'm afraid.

Riots - illegal. Race riots changed this country.Protest marches - Illegal in British India. Gandhi's marches changed that country and influenced several others.Large Gatherings of People - Illegal in East Germany. Brought down the Wall and reunified a country. It's helping to control the unbridled capitalism in China.

In fact, Ars had an article a long time ago about land-owning laws in the days of the Wild West which did not recognize the ownership rights of people who just set-up camp on un-occupied land and lived on, and tilled that land. But people did so illegally anyway. So many people did so that Congress was eventually forced to alter the law to match people's expectations. So, illegal activities can 'fix things'. Doesn't always work but you don't know until you try.

I don't see any reason why this would apply to overseas imports only. There are plenty of companies locally who sell copyrighted goods at different prices depending on who is buying them. We don't see it much today because they need to compete with secondhand sales. This court case could change that.

The reason that it would only apply to overseas imports is because that is all the case is about. The worst possible outcome of this case is that the Supreme court rules as it would have in the Omega case if Kagan hadn't recursed herself; that is that the right of first sale applies to the first legal sale in the US, not to foreign sales. So, yes repeatedly stating that this ruling could completely eliminate the right of first sale, or "stop you from reselling anything" is completely hyperbole and click bait.

If you are worried about the erosion of the right of first sale then look at EULAs and the trend for everything to be "licensed" not sold, not so much this case.

The World is Flat should apply to corporations as well as workers. First world corporations take advantage of lower-cost labor in the third world to outsource manufacturing -- and on a global scale this is a good thing. Yes, it may increase unemployment in richer nations, but if it reduces the number of people starving to death in places like China and India, I don't see how anyone can argue that this is morally wrong.

But conversely, consumers should be able to take advantage of lower prices in other countries. Yes, that means reduced profits for the corporations, as prices converge toward the mean, but fair is fair. The free market should be free in both directions.

I was just so shocked that someone besides myself went to the school of practicing-psychics-and-magicians-who-can-tell-the-future-and-complete-consequences-of-possibly-over-reaching-court-decisions-and-who-should-and-shouldn't-be-allowed-to-make-posts-on-them.

Who was your homeroom teacher? Mine was Madam Inga. She was a good psychic, but she was covered in hives from that one time she tried to gain complete insight to the consequences of the DMCA.

This isn't psychic anything. Look at the case at hand and remember that the Supreme Court rules on the specific case and doesn't issue broad policy rulings. So taking a case about importing textbooks into the U.S. and extending it to every consumer good bought by people in the U.S. is really overreaching.

I do have a gift. Despite all the tech people talking about an Apple making an apology in the U.K., I knew it wouldn't happen. It didn't.

I use to respect America even if I didn't agree with them on everything, but over the last decade that country has turned itself into a laughing stock, the pure and utter stupidity is just staggering.

More and more the rest of the world is looking at the laws coming out of America and going "WTF Mate?"... between their staggering debt, and utterly retarded laws they are becoming more and more irrelevant.

How utterly STUPID and/or CORRUPT does a judge have to be to even AGREE TO HEAR A CASE LIKE THIS?

I would argue that this isn't just a copyright issue it is also a restraint of trade issue.

The bigger question though is how is North America supposed to compete with the rest of the world when our input costs are always higher and often artificially so? If I have to buy some thing for my business and I have to pay double the price for it that my competitors do how do I compete? If I want to own a home that means I have to meet fire regulations, building code regulations etc. If I have to meet all that I need to ask my employer for $X. Where as some one in the third world can build a home for 1/5 the price and can also afford to work for less. It isn't just a case of me being fat and lazy it is also an uneven playing field.

If we are going to have world markets lets have world markets otherwise lets not. Being Canadian what we see often is some thing made in Canada sold in the US for much less that it is sold for in Canada. But then it is illegal to import it back into Canada. It's incredibly unfair. Or as a French winery put it once. We have to charge our domestic customers more so we can subsidise our sales in the US other wise we couldn't compete in the largest market.

This article predicts some rather dramatic effects if the Supreme Court upholds an interpretation of the law that courts have unanimously held over the past 30 years.

The idea that there is a 30-year-old consensus that first sale is negated on goods made abroad me seems disingenuous. The Supreme Court found against rightsholders in 1998 (Quality King), and now we have Costco v. Omega -- a 4-4 split. There's no consensus.

Even if the rightsholders *had* won every case in the last 30 years (which again, is not how I read the history), their attempts to use copyright to interfere in resale markets--particularly internet markets--can't be portrayed as something that's been agreed to for 30 years.

I'm not being disingenuous. Quality King involved goods first manufactured in the US, not goods first manufactured overseas, as here. No court -- including three appellate courts (2nd, 3rd, and 9th) -- has held the first sale applicable in the latter. Neither has any of the major treatises (Nimmer, Patry, or Goldstein).

I wondered why our near future skies are going to filled to the brim with drones hovering above every neighborhood in the country.They will be spying on garage sales or even kids selling drinks at lemonade stands. This is surely something this conservative Supreme Court will endorse without question as they have already proven by past judgements that it is only the appropriation of "filthy lucre" that concerns them. Alluding to common sense in their eyes is something that will undermine and dilute capitalism and will eventually be the ruination of the country and kids selling lemonade for profit.

I don't see any reason why this would apply to overseas imports only. There are plenty of companies locally who sell copyrighted goods at different prices depending on who is buying them. We don't see it much today because they need to compete with secondhand sales. This court case could change that.

The reason that it would only apply to overseas imports is because that is all the case is about. The worst possible outcome of this case is that the Supreme court rules as it would have in the Omega case if Kagan hadn't recursed herself; that is that the right of first sale applies to the first legal sale in the US, not to foreign sales. So, yes repeatedly stating that this ruling could completely eliminate the right of first sale, or "stop you from reselling anything" is completely hyperbole and click bait.

There is a situation I guess you could call the 'middle ground' in which first sale doesn't apply to goods manufactured abroad but somehow 'kicks in' after the first sale in the U.S. However, the rightsholders absolutely are asking for a situation that could result in perpetual control over copyrighted goods -- they are asking to eliminate "first sale," full stop, on goods manufactured abroad. So only 'authorized' markets for resale could exist.

You seem confident the Supreme Court would never endorse that position, and would only adopt the 'first U.S. sale' rule, but I don't know why you would be so sure. We don't know what the court's thinking was in the 4-4 split on Costco-Omega, because no opinion was published. Rightsholders are asking to eliminate 109(a) and in several cases they have won.

If the publishers win, it's time for a book burning methinks. But a very selective one. Students should steal overpriced books from their campus bookstores and publicly burn them. Why? It would be a much more succinct and unmistakable statement of how 'the people' feel about the ruling than some long-winded, lobbyist-dominated campaign at convincing Congress to overturn the Supreme Court.

A drastic approach, but it seems like the only way to be heard over the sound of money is to be very, very loud. And large-scale, public book burnings would be a very loud statement indeed.

No what they should be doing instead is convincing their universities to begin using open source text books instead of these expensive over priced ones. Free text book, but afaik it's fair beans to have to pay for the yearly assignments that the company makes.

This will be a very hard decision to make for the Supreme Court, as it affects a lot of things. In fact, it affects corporations like Amazon and Walmart more than anybody else. If Kirtsaeng wins, prices for goods will go up to match near the most expensive market(less expected shipping costs). If they don't, we will have the problem of Amazon and Walmart will just import the cheapest option to increase their profits, which in turn hurts small businesses as they won't be able to compete with those prices, at all. Amazon and Walmart will be able to cut prices on things, and STILL retain a profit, whereas the small businesses will not be able to.

What?

Prices are fixed by the ratio of demand to supply, so the demand of these goods in the US will fall to the ground as it flies to other countries where prices are more reasonable (probably for a lot of other reasons than supply and demand, I wonder if the author of that article examined the reason for the discrepancy: the UK isn't exactly poor compared to the US so there are obviously other factors involved).

The consequence is that prices will have to fall in the US for these goods to become sellable again and they might go up slightly in these other countries (the US market is smaller than the EU's so at most demand would double, in practice probably less).

If anything if Kirtsaeng wins the US distributors/publishers/whatever will have to renounce their ridiculous margins and kinda commoditize their goods to the (profitable!) levels of the other countries such as the UK, that's not likely to be life threatening for them and if anything is how competition is supposed to lower prices to the consumer. That's a good thing in my book.

If what they did to these books in the US really provided added value then these margins would be sustainable but clearly there's no added value so off with them.

I fail to see how the mom and pops sellers will be affected by all this other than positively, they don't get to see any of these fat margins anyway and with goods prices going down they should sell more.

The 4-4 result of Costco v. Omega doesn't bode well for the consumer advocates, online marketers, and resellers who are supporting Kirtsaeng. Four justices decided to support the copyright-owner even in a case where the copyright itself was dubious; the 'swing vote' is Justice Kagan, who is on record as supporting Omega when she worked for the government.

When Justice Kagan was Solicitor General, she on the record supporting the position of her client, the US government, not her own personal position, or how she would rule once on the bench with life tenure, which MAY or MAY NOT coincide. That had long being the tradition of the US legal system, even before there was an US legal system, i.e. John Adams' defense of British soldiers after Boston Massacre.

Personally, I hope the content holders lose this one and be forced to change single price globally. The abilities of those publishers to price discriminate resulted in the wipe-out/stillborn of many local publishing industry. It's hard for Chinese/Indian/Thai/etc. textbook publishers to compete with Wiley under the current system.

As somebody who has traveled broadly around both Europe and Asia, and lives in the US, the way some large content owners try to divide rights to their works has always struck me as out-dated at best, and at times infuriating as a consumer.

For example, there are some Taiwanese bands that I listened to while I was in Taiwan, but I simply can't hand over my money to buy their music on iTunes, even though it's sitting there in Apple's servers, because it's only been marked for distribution under the "Taiwan iTunes Store". And there's really no difference in pricing between the US and Taiwan.

The same is true when I'm overseas and try to access a service like Hulu, or even sports highlights on ESPN. Of course, a simple proxy can completely get around that. The internet is not supportive of divisions.

I can understand the desire to divide television content for advertising purposes, but I think that is a surmountable challenge. The web has certainly figured it out.

The sooner large media companies figure this out and universalize their content, the better. Otherwise I think they're going to continue to struggle with sites pirating content and continue to lose out economically to alternative forms of entertainment.

I call bullshit. This will only apply to people in the United States that purchase goods themselves overseas, import them themselves into the U.S. and then try to sell them as new in the U.S. When I buy a device from Apple, for example, the point of purchase is in the U.S., not in China. I will be able to resell any Apple device all I want in the U.S. regardless of the outcome of this case.

What happens if the chipmaker of the iPad (Samsung in your case) decides that Apple illegally imported the chip and the software (ARM instruction set, etc.) into the United States. The sale from Apple to you is now illegal and you no longer legally own one portion of your iPad. Now imagine each component manufacturer (who had some copyrighted material included in their component) decided to do that. When does the insanity end?

Now imagine another scenario. What happens if you bought an iPad abroad directly form Apple (because you lived in Germany for a bit and decided to move to the United States)? Apple can claim that you have absolutely no right to sell the item to anyone because first sale will no longer apply, since iOS is copyrighted material.

I call bullshit. This will only apply to people in the United States that purchase goods themselves overseas, import them themselves into the U.S. and then try to sell them as new in the U.S. When I buy a device from Apple, for example, the point of purchase is in the U.S., not in China. I will be able to resell any Apple device all I want in the U.S. regardless of the outcome of this case.

I don't think you are correct. Wiley is making the argument that goods made abroad are simply not subject to section 109(a). That section is the first sale doctrine, which allows “the owner of a particular copy . . . lawfully made under this title . . . is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy.”

Their argument is that section 109(a) does not apply to foreign-made copies. Full stop.

After briefly looking over the brief (no pun intended), I think an interesting question remains:

What exactly are the goods being "made"?

If the goods are the books, ie items made from paper, cardboard, and glue, then sure. These were clearly made outside of the USA and US laws don't apply.

But if the goods are the content on the pages, the Intellectual Property, then perhaps not. Were the contents of these textbooks entirely written outside of the USA? Or did all the contributors come from big American Universities? Or was it a mix of foreign and domestic writers, making everything more complicated.

If its shown that the content is the product in question, as I think the publishers want deep down to be true, then I would say that section 109(a) very much applies, if the content was created in the USA, even if the cardboard and glue transport mechanism was not.

If you try and say that the content and the book are inseparable and the same thing, then the question arises whether foreign produced books have any copyright protection at all in the US. Because, under this assumption, this content wasn't made in the US. If coming from China where we have limited copyright sharing treaties, this could be very bad for publishers.

This article predicts some rather dramatic effects if the Supreme Court upholds an interpretation of the law that courts have unanimously held over the past 30 years.

The idea that there is a 30-year-old consensus that first sale is negated on goods made abroad me seems disingenuous. The Supreme Court found against rightsholders in 1998 (Quality King), and now we have Costco v. Omega -- a 4-4 split. There's no consensus.

Even if the rightsholders *had* won every case in the last 30 years (which again, is not how I read the history), their attempts to use copyright to interfere in resale markets--particularly internet markets--can't be portrayed as something that's been agreed to for 30 years.

I'm not being disingenuous. Quality King involved goods first manufactured in the US, not goods first manufactured overseas, as here. No court -- including three appellate courts (2nd, 3rd, and 9th) -- has held the first sale applicable in the latter. Neither has any of the major treatises (Nimmer, Patry, or Goldstein).

Let me phrase it more carefully -- if you are suggesting there has been consensus over rightsholders interfering in resale markets, I would disagree.

If you are suggesting rightsholders have won a lot of legal victories in this area over the last 30 years -- more than the other side -- I would agree, you are right.

However, I would disagree with you about the meaning -- the overall, take-a-step-back meaning -- of Quality King. I understand the case only involved re-imported U.S. goods, but I still think it was a clear setback for rightsholders. They wanted to control a resale market -- they lost. It wasn't like they thought "oh, that's fine, we just wanted to control goods made abroad anyhow." They wanted to control all the resale markets, but they lost that battle in 1998. Now they found a way to re-fight the fight, focusing on just part of the market--goods made abroad, which is, well, practically everything.

What i see happening: Yeah libraries are overrated, they should all be shut down! No ones making money out of them.

If this case actually passes this would devastate the market. It could mean death for Craigslist, eBay, used books, DVD music sellers and would suck for people that want to sell their old things. Very unlikely to go too far

Let me phrase it more carefully -- if you are suggesting there has been consensus over rightsholders interfering in resale markets, I would disagree.

If you are suggesting rightsholders have won a lot of legal victories in this area over the last 30 years -- more than the other side -- I would agree, you are right.

However, I would disagree with you about the meaning -- the overall, take-a-step-back meaning -- of Quality King. I understand the case only involved re-imported U.S. goods, but I still think it was a clear setback for rightsholders. They wanted to control a resale market -- they lost. It wasn't like they thought "oh, that's fine, we just wanted to control goods made abroad anyhow." They wanted to control all the resale markets, but they lost that battle in 1998. Now they found a way to re-fight the fight, focusing on just part of the market--goods made abroad, which is, well, practically everything.

I'm not sure what you mean by "rightsholders" -- Quality King involved Quality King, not "rightsholders." And even assuming rightsholders did want to "control a resale market", what evidence do we have of that occuring after the 3rd Circuit held in 1984, as here, that the first sale doctrine doesn't apply to goods manufactured overseas. Your theory that "rightsholders" want to "control the resale market" lacks any substantiation.

No, you don't OWN "Fifty Shades of Grey," you have purchased the right to consume the information contained in the binding or delivery method of your choice. If someone buys your "used" copy, what right do you have to sell the information contained in the book? Doesn't the writer/copyright owner have a right to compensation EVERY TIME his/her intellectual property is consumed by someone new?

Well, the publisher accepted your lump sum as payment for both the medium and the information, so I assume they are cool with that. Otherwise they would be selling scrambled text and charge a fee for arranging it into the words in the books.Not to mention the ridiculous situations it causes.\sUps, I accidentally disconnected my headphones and now everyone in this room is hearing this great music I'm playing. Better go to iTunes and buy this tracks again...\sI swear, sometimes I think that the people who use this arguments are spambots, or at least they have never communicated with a human being in their entire life.

No, you don't OWN "Fifty Shades of Grey," you have purchased the right to consume the information contained in the binding or delivery method of your choice. If someone buys your "used" copy, what right do you have to sell the information contained in the book? Doesn't the writer/copyright owner have a right to compensation EVERY TIME his/her intellectual property is consumed by someone new?

So, you buy a car. And the car has software written by some dude. Are you saying that you cannot resell the car? Or that when you resell the car, you have to pay a portion of that sale back to GM? Or let's say I buy a table. Later, I want to sell this table. But in your scenario, I would have to reimburse the craftsman for a portion of that sale.

Or I buy a loaf of bread, and sandwich meat, and mustard. And I then make sandwiches, and I sell them. In your world, I must repay the baker, butcher, and saucier for their time. And the purchaser, should they desire to share that sandwich, would need to then pay the baker, butcher, and saucier. Even if they gave it away, the person they gave it to owes the baker, butcher and saucier because "Doesn't the writer/copyright owner have a right to compensation EVERY TIME his/her intellectual property is consumed by someone new?"

You have just made libraries extinct. You've made schools extinct (how can a school afford to pay for a textbook in every school year for another 10,000 students? It simply can't) You have nearly destroyed the concept of "personal property" because no property is personal, it's communal between you and the creator.

What you've done is created a Totalitarian "Full Socialist" regime where instead of the state owning you and your shoes and your vodka, corporations own you and your shoes and your vodka.

This may make your Ayn Randian nipples hard, when all the Johns Galt get their due rewards for every particle of air they exhale ("you're breathing my air... I--as an act of pure art--moved those molecules into your neighborhood by walking through it. Pay up!"), but it's a dystopia.

The problem is that Wiley's argument is probably technically correct, and wholly disasterous because if the first-sale doctrine doesn't exist past our borders, then anything made of parts bought in a foreign market and imported becomes tainted goods. Until we create some kind of VAT-style licensing system where everyone agrees that some things with a paper-trail are legally covered under that section, but things without a paper trail aren't.

Whenever I see stories like this, I think about what made the people involved do that in the first place, then decide if it was a reasonable action.

In this case, the people involved were mostly students, they did it because of the high-cost of domestic textbooks compared to foreign versions and decided to save money. They also saw a market (such as it is) and took advantage of it.

I consider it a reasonable action because they did pay the publish for the book. Irrelevant of where, why or how, the publish got the money they wanted from the sale of that book. Re-selling the book is just basic importation. While technically not a "new" book, marketing a still-sealed textbook as new is not exactly false advertising.

Basically, there was a flaw in the market that allowed companies to perform market segmentation on a global scale, setting prices differently in different countries by what they could squeeze out of them. Fine, good on them for doing that, but it relies on customers not being able to discover the cheaper options. While obviously people have been discovering this flaw for decades, it wasn't until the ubiquity of internet access that a significant portion of the market knew about this. The "flaw" that the rightsholders were abusing in this case was fixed by making it easy for customers to shop around.

I see this no different from a supermarket pricing lower than a competitor for the same goods. It's basic market forces pushing prices around in response to profit-making and competition. Just because it's from another country doesn't mean that the basic rules of capitalism change.

When somebody undercuts your market, you respond using the same system. You improve quality or lower prices or offer special features ("Free supplementary appendix!"). You do something to either negate the price difference, or justify it. You don't go running to the government crying "Mummy, the Thai kid isn't playing fair! He's abusing the same loophole we are, it's OUR loophole and he isn't allowed in!".

So their argument is that the goods being produced abroad not under the US's Copyright Act, so the first sale doctrine should not apply? Well guess what, if it was not produced under our Copyright act, then NONE of it should apply, so no copyright protections at all.

The shampoo bottles in Quality King had been made in the US but then shipped abroad, and re-imported. In cases where goods were actually produced abroad—as foreign textbooks generally were—copyright owners argued unauthorized importers were guilty of infringement. Because imported foreign textbooks were not "made legally under this title [the Copyright Act]," they weren't subject to first sale at all. Or so the thinking went.

I call bullshit. This will only apply to people in the United States that purchase goods themselves overseas, import them themselves into the U.S. and then try to sell them as new in the U.S. When I buy a device from Apple, for example, the point of purchase is in the U.S., not in China. I will be able to resell any Apple device all I want in the U.S. regardless of the outcome of this case.

What happens if the chipmaker of the iPad (Samsung in your case) decides that Apple illegally imported the chip and the software (ARM instruction set, etc.) into the United States. The sale from Apple to you is now illegal and you no longer legally own one portion of your iPad. Now imagine each component manufacturer (who had some copyrighted material included in their component) decided to do that. When does the insanity end?

Now imagine another scenario. What happens if you bought an iPad abroad directly form Apple (because you lived in Germany for a bit and decided to move to the United States)? Apple can claim that you have absolutely no right to sell the item to anyone because first sale will no longer apply, since iOS is copyrighted material.

I understand why textbooks are cheaper in, say, India, but what surprised me most was that there were such big differences between the pricing in the US and the UK. How do they justify huge differences in pricing within the first world?

If the publishers win, it's time for a book burning methinks. But a very selective one. Students should steal overpriced books from their campus bookstores and publicly burn them. Why? It would be a much more succinct and unmistakable statement of how 'the people' feel about the ruling than some long-winded, lobbyist-dominated campaign at convincing Congress to overturn the Supreme Court.

A drastic approach, but it seems like the only way to be heard over the sound of money is to be very, very loud. And large-scale, public book burnings would be a very loud statement indeed.

Not to mention, supporting crime at all is not the way to fix things.

So we should just listen to the Copyright Office and not jailbreak our tablets?

If the decision goes in favor of killing the first sale doctrine... what would be the likelihood of the opposition of that ruling going for a Constitutional amendment to restore first sale doctrine? Basically, nail it down in a place the courts cannot overrule?

It's a lot easier and cheaper to pass a law taking away rights, than to create them. Just look at how tiny the "Bill of Rights" is next to the rest of the Win32-dwarfing legal code.

Heck, it is understood to be a founding principle of this land that you only have the right to do things that are permitted by law, and any other action unanticipated by the Founding Fathers (such as putting crunchy stuff in yoghurt) is hereto and therefore illegal. I don't see any first sale in The Constitution, so what are we still arguing about?

The very idea of corruption in the whole school textbook publishing field is simply unthinkable, though. The very sculptors of our children's minds are, by reason of thaumatic causality inversion, moral and pure. Only video games can possibly corrupt a virgin mind.

Boo-freaking-hoo. Knowledge is expensive. Ignorance even more so. Text books cost a lot. But I have to side with the publishers on this one. In fact, I have to go much further than they do....If you resell that text book for fifty bucks, forty dollars should got to the person who WROTE those words, not you, since the new owner will be consuming them just like you.

What a ridiculous sense of entitlement. People with your viewpoint need a bitch slap from reality. Copyright is a legal monopoly whose sole purpose is to benefit the public. It does so by giving a chance to benefit to authors, but their benefit is only a means to an end. The interests of authors themselves are inconsequential other than the effect a policy has on their output (had personal rights not progressed so far at that point, an alternative policy might have involved whipping authors to get them to write more). The increases in new works authored by your policy would be almost certainly nothing, and you would have decimated property rights and destroyed libraries. If you aren't willing to accept the first sale doctrine and its vital importance, then we can just call it a day and get rid of copyright altogether to shut up ingrates like yourself who aren't happy with a system that is already far more generous than it should be.

Furthermore, it can easily fall into conflict with the first amendment, since your proposed policy could prevent the spread of information that is conflicting, provided that there is a copyright holding party that doesn't want certain information to be spread, like VHS tapes of Han shooting first or history books that point out that we were once at war with Eastasia. (For Chist's sake, you are proposing something that brings up a LEGITIMATE usage of Orwell). Remember, before copyright had a noble goal of furthering information, it was a means of censorship. What you are suggesting is in many ways more comprehensive than an undeniably evil institution, since it generally only applied to creation of new copies.

The math of all this would be thus: You buy a textbook for a hundred bucks. Of that hundred bucks, ten dollars is for the paper and ink that makes it up, and trucking and warehousing and stocking and retailing that book. The rest is for the intellectual property in it. You SHOULD be able to sell that book for ten bucks if you scramble all the words first (leaving the value of paper and ink). But the words are not your words, the ideas are not your ideas. If you resell that text book for fifty bucks, forty dollars should got to the person who WROTE those words, not you, since the new owner will be consuming them just like you.

Who the heck is going to decide how much the intellectual property portion is worth? If the knowledge in the book is worth $100 today, is it always worth $100? Is the information in a genetics textbook written before the discovery of DNA still worth as much today?

"Kirtsaeng and his amici contend that if the Court accepts this natural reading, economic ruin will follow for a litany of interested parties, from commercial retailers to charitable organizations to factory workers to flea-market sellers," write lawyers representing the MPAA and RIAA in their amicus brief [PDF]. "[T]here is no evidence this long-recognized principle has actually impaired any important secondary markets or led to imposition of liability on well meaning librarians, teachers, or garage-sale hosts. ..."

Consumerism under Modern Copyright Law: Assume that whatever you're doing right now is or will eventually be illegal, and a copyright-holding/patent-owning corporation somewhere will screw you to a wall in a poorhouse if it becomes worth their time and effort. But don't worry, in at least several cases it won't be worth their time or effort.

This is essentially, of course, like all practical ethics we should be reinforcing in our children, business leaders, and politicians: what you're doing may be deemed wrong or illegal but that's fine as long as no one is likely to catch or effectively punish you. Just keep your infringement less interesting than the Other Guy's, and it helps if he's located between you and the plaintiff. And hope you never run out of Other Guys.

This may make your Ayn Randian nipples hard, when all the Johns Galt get their due rewards for every particle of air they exhale ("you're breathing my air... I--as an act of pure art--moved those molecules into your neighborhood by walking through it. Pay up!"), but it's a dystopia.

There is nothing Randian about this. Rand was against government picking winners. If you read Atlas Shrugged you would know one of the plot points was business getting together to eliminate competition and how bad that was for everyone. If anything Kirtsaeng would be a hero in a Rand book. He would be Ragnar Danneskjöld in a way, he is using the looters (textbook publishers) system against them.

There is lots of good reasons to think Ayn Rand is full of shit. However if you think she would support Government imposed markets then you know nothing about the woman at all. I mean _nothing_ less than zero, you have been mislead.

I'm generally opposed to piracy on pragmatic grounds. Widespread piracy leads directly to things like always-on DRM on games and single-player games that you can't play unless you're connected to the Internet.

But textbook companies need to realize that this sort of heavy-handed behavior will, like it or not, lead to widespread piracy. From a purely bottom-line perspective, publishers should take their profit for selling a $50 book at international rates (rather than a $200 book at US-only rates), if it the alternative is the majority of college students using pirated texts.

That sort of piracy would not necessarily be the best thing for students either. If textbook publishers can't make any profit at all because of piracy, expect a shift to ad-supported textbooks. "Congratulations, here is your free copy of Introduction to American History, sponsored by ExxonMobil."

<quote>the case is a long-awaited rematch between content companies seeking to knock out the "first sale" doctrine on goods made abroad </quote>

Your opening paragraph demonstrates such gross misapprehension of the issues in this case that it forestalls disappointment with the remaining reportage. Which merely meets the standard of the opening paragraph.

I am a big fan of the first sale doctrine, and would not like to see it curtailed. But what Wiley & Sons are going for here is not to prevent re-sale of everything made abroad. All they want is to prevent re-sale, here, of things first _sold_ abroad. That is a big difference. You still may not like their actual goal, but, please, at least report it clearly.

Thanks much.

You are right they are not trying to wipe out the entire first sale entitlement.They are only attempting to eliminate first sale entitlement for goods purchased outside US. Goods sold in US are reserved for a future attack. The current attack will mean that Goodwill, St Vincent de Paul, Salvation Army, Cancer Thrift stores and church rummage sales to name just a few businesses that are firmly based on First Sale Doctrine can be prosecuted for sale of a foreign edition of anything, So that particular fear is very real even with the limitation you have noted.

The cases noted above are all private individuals buying retail editions, selling in the second hand market. That is sellers who are the First Buyers are reselling their legally purchased property (from properly licensed and authorized retail outlets) in a country other than the one where the First Sale was made...see above where I noted that used product sellers may be prosecuted for sale of foreign editions under this reading of the law.

The basic argument being used is that if the sale was not made in US Territory, then it was not legally sold. Of course that leaves the legal position of buyers who do not try to sell their copies in US in question. These lawyers are trying to say that a buyer in Lyon France who wishes to sell a book to his cousin in Los Angeles Calif. could be prosecuted for illegally selling a copy to an American and exporting it to the US. That is not in this particular set of arguments, but go back and look at the description of the Omega case. The ruling was not that Omega could not enforce their copyright, but only that the item in question did not qualify for the protection.First they came for the Jews...

EDIT:After reading the citations in the brief ( http://www.americanbar.org/content/dam/ ... eckdam.pdf )it looks like Wiley will win this case. The reason I think so has nothing to do with First Sale, but instead the stand alone clause that says the work cannot be imported to the US without permission from the copyright owner. Import/Export law is independent of Copyright law and Customs does not worry about the current owner, but instead over whether the item can legally cross the border.

Since the copyright notice printed in the books cited apply in the country where the books were sold, the restriction that states the books may not leave the country leaves the person removing the book from the country open to prosecution under that country's laws. At the same time the US copyright law forbids the import of copyrighted (under US law) goods without permission of the copyright holder.

Notice that there is no mention of the ownership of the individual work, but instead ownership of the copyright that restricts copying of the individual work.

The question is: Is it legal to import an item that may not be legally exported from the country of origin?

If the answer is that an item illegally exported from another country cannot be considered a legal import in the US then Wiley should win. The First Sale arguments are a distraction in this event.

If the answer is that an item illegally exported can be considered a legal import, then the question becomes: Does First Sale apply to the first US buyer or to the first time it is purchased from an authorized retailer?

First US buyer then creates the interesting situation of an authorized retailer making a sale to a retail buyer IF the purchase does not enter the US with the retail buyer becoming a wholesale distributor under US law if the product enters US. (Note this second case assumes the argument that the importer failed to get permission to import is invalid because the purchase was outside US. Which sounds absurd since it would be an import only if purchased outside US )

The various second hand markets can legally be sued for resale of foreign works that have not been made available in US if Wiley wins...it is the import/export laws that make it illegal for them to sell a copyrighted work that was never offered for sale in the US by the copyright owner or authorized agent. The import restriction applies no matter how many times it has been sold in the secondary market. unless the court rules that First Sale doctrine entitles the buyer to authorize the import of the purchased item.